New-home production, although still near the high levels of the past few years, decreased in October compared to September 2004 and October 2003, the California Building Industry Association reported Wednesday.

New housing units as measured by permits issued for October 2004 totaled 16,738, down 3.3 percent from the previous month and 17.9 percent below October of last year.

Builders began construction on 11,159 single-family homes in October, down 10.6 percent from September and down 13.8 percent from year-ago levels. Multifamily construction remained volatile, with construction getting under way on 5,579 units in October, up 15.6 percent from September but down 25 percent from October 2003.

Despite the modest drop-off in October, overall housing starts for the first 10 months of 2004 totaled 173,732, up 7,378 (4.4 percent) from the same period a year ago. Single-family starts totaled 128,026, up 8.7 percent from 2003, while construction began on 45,706 multifamily units, down 5.9 percent.

Among the state’s five major regions, housing starts were higher in October than in September in Southern California (up 10 percent), the San Joaquin Valley (up 7.6 percent) and the Sacramento-Sacramento Valley (up 2.4 percent). Declines were registered in the San Francisco Bay Area and Central Coast regions, down 3.5 percent and 7.4 percent, respectively. The statistics were compiled by the Construction Industry Research Board in Burbank.

Despite the October slowdown, California builders are still on pace to construct about 204,000 homes in 2004, the most since 1989. However, even that level of production is still not enough, said Robert Rivinius, CBIA’s chief executive officer.

“It’s simple economics – scarcity has driven up home prices to unheard of levels,” Rivinius said. “We need commitment from city, county and state government to make more land available for the new homes Californians need. With the state’s population growing by nearly 600,000 people each year, we need regulatory relief to keep up with that growing demand and make the dream of owning a home a reality for more California families.”

The California Building Industry Association is a statewide trade association representing more than 6,000 building professionals.


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